What Did You Buy Today?

[fenders53]

(03-25-2021, 10:21 AM)Otter Wrote:

(03-25-2021, 10:11 AM)crimsonghost747 Wrote: Okay so I have to ask you guys. Since I keep seeing this happen again and again and again. And it's stupid. But the pattern is there.

So every time the US gets bad unemployment or other major economic numbers, the market goes up.
When the numbers are good, such as today (new unemployment claims at their lowest point since corona started) then the markets tank.

It appears as if any sign of a recovery in the actual economy is met with a red day. Any sign of things getting worse and it's a green day.

Now if this is true, then the only force holding together this market is Uncle Joe and the FED pumping more free money everywhere.  Again, if this is true, then the markets have become completely disassociated from the economic realities are running simply on the dream of infinite free money from the  government.

Someone tell me how this does not end badly?
Or better yet, tell me what I'm missing?

This was also true during 2008-2020. Buy the rumor sell the news, taper tantrums, etc. The markets always climb a wall of worry. Investing websites were full of articles in 2011 talking about how overvalued everything was. People who bought and held a decade ago are doing quite well.

They do and it usually last for years.  Individual stocks do as well and it causes me to sell significantly early about 50% of the time.  I do need the market to make some sense long-term though.  I only get truly concerned when I have no thesis for a company to grow into their lofty PE.  If a mature company has traditionally traded with a PE between 15-25 for decades and now it is 65, I need a legitimate growth story.  How do they get part way to justifying it in three years, not 15 years.  Part of our motivation to hold Aristocrats is we will not see a fatal drawdown during recession.  Some of the blue chips are ripe for a 60%+ pullback.  Whether it's next year or five years it will be painful and something I'd like to avoid or at least mitigate.  I typed an entire paragraph and all I said was I am convinced valuation still matters eventually.  I refuse to get destroyed when FED magic ends, and someday it will.

NKE is a good one to discuss. With one exception year since 2011 (before now) their High/Low PE range was typically 35/25 and it didn't stray much. Now they are at 65. Clearly overvalued right? We'll not if they grow EPS at 45% CAGR the next three years, and that is what many analysts predict. Many other blue chips can't be justified as the growth story isn't there or even predicted.